New trade route linking WA to Asia is set to make it cheaper to live and work in the state’s powerhouse region
A new trade route directly linking Western Australia to Singapore is set to make it cheaper to live and work in the state’s powerhouse region.
- Three direct freight links have been established between the Pilbara and Asia
- Karratha Mayor Peter Long said shipping costs could be halved by freight being sent direct to the Pilbara
- Companies hope direct freight will help to reduce the cost of living in the Pilbara
Cargo ships have historically passed by the Pilbara, instead heading south to dock at Fremantle, where trucks pick up goods and drive them 1,500km north again.
But that has changed, with three direct shipping freight lines now established in the Pilbara, linking the region to Asia and beyond.
Two routes link Singapore to Dampier and a third joins Singapore with the world’s busiest export port, Port Hedland.
City of Karratha Mayor Peter Long said shipping costs could be halved with freight coming directly into the Pilbara.
“It’s an exciting project because it reduces greatly the cost of freight and the time in getting it here,” he said.
ANL established its direct shipping line from Port Hedland to Singapore in November.
General Manager of Business Development and Inland Business Chris Shultz said maritime links reduce the cost of living by making goods like building materials cheaper than they would be if they had to be transported by rail or road.
“What we’ve done in other places is to look at moving cargo from Australian main ports, so Melbourne, Sydney, Brisbane, up to Singapore on existing services and then down to the Pilbara,” he said.
Less reliant on Perth
The Chair of the Freight Logistic Council of Western Australia, Nicole Lockwood, said a direct freight link marked a region’s status in the economy.
“When you get a direct airline service it’s always a big indicator, when you’ve got an airport that’s a big indicator, when you’ve got a port that’s a big indicator,” she said.
“Hopefully then other things will start to grow too like population and their services continuing to increase, as they have over the past 10 years.”
Mr Long said the Pilbara was the engine room of the nation and it exported $100 billion worth of goods last year.
He said direct freight would make the region less reliant on Perth — which he said was important in light of recent floods.
“That is always a problem for us particularly in the summertime where there’s cyclone and heavy rain, the roads often get washed out,” Mr Long said.
“Now any freight that’s coming out of Singapore will come in directly and it won’t have to wait on the road, when the road is washed out.”
Two years ago, maritime expert Paul Toussaint-Jackson wrote a report, commissioned by the City of Karratha, about the benefits of direct freight in the Pilbara. Now he has helped Australian company Sea Swift establish a direct freight line.
Sea Swift had its first ship arrive in Dampier last week.
He said with the Pilbara being so close to Asia it was important for the region to face outwards.
With rising house prices and a prosperous iron ore industry, all signs indicate the Pilbara is approaching a mining boom.
Ms Lockwood said the timing of the direct shipping being implemented was excellent.
“Off the back of a period where everyone was looking for opportunities to increase productivity in the region and now it’s well placed to really ride this next phase of growth and hopefully deliver back some benefits,” she said.
‘Huge efficiencies’ to be had by using direct freight
Ms Lockwood said logically direct freight makes sense for the Pilbara.
“It is also difficult when you’ve got very large businesses that work on global supply chains to reposition those to come through one destination,” she said.
Mining giant Rio Tinto is one of those companies.
The mining giant’s first freight ship from Singapore docked in Dampier last week.
Richard Cohen is the managing director of port and rail services and said a large amount of the company’s freight comes from Asia.
“Clearly there are huge efficiencies to bring it into Dampier,” he said.
The first shipment by Rio Tinto had a range of rail components and conveyer belts.
“We’ve certainly got aspirations to put other things on it like tyres in particular, but over time we’ll build and build,” he said.
The ship which is headed back to Singapore is empty, but Mr Cohen hopes the volumes will grow over time.
Mr Shultz said in ANL’s past five journeys some ships have sailed with over 150 containers on them from Port Hedland.
He said, in the future, the company would like to have two vessels coming into dock every ten days in Port Hedland, Dampier and possibly even Onslow.
Dr Elizabeth Jackson, from Curtin University, said getting trucks off the road was also a win for the environment.
“Maritime transport one of the most environmentally friendly modes of moving cargo,” she said
Rio Tinto expects direct freight to the Pilbara to reduce the lead-time for goods into the Pilbara by six to 10 days compared with shipping freight via Fremantle.
Annually, the company said it would save three million litres of diesel fuel by reducing road train travel from Perth.
Service needs local support
Ms Lockwood said for direct freight to be successful in the Pilbara it would need the support of local businesses.
“The more businesses that use it, the more goods that are being shipped therefore the more likely it is that the services will continue and potentially frequency could increase,” she said.
Ms Lockwood said it was yet to seen how the cost savings would be passed on
“When you start these services, they are often subsidised, so the full cost-benefit may not pass through in the first instance until the service is sustainable,” she said.
Mr Toussaint-Jackson said Sea Swift’s roll-on roll-out service had already received support from local business.
“What has been an exciting development for us is the opportunity to export Finnish stone in very large quantities, it’s an opportunity for the Pilbara to have a whole new export,” he said.
Mr Toussaint-Jackson said he was not worried about competition because the freight study showed there was room for a number of players.
Mr Schultz said there were opportunities with direct freight shipping lines to transport recycled tyres from the Pilbara and possibly refrigerated cargo in the future.